With all the attention focused these days on holistic remedies,
organic produce and botanical beauty products, it's no surprise
that interest in spa treatments is on the rise. Everyone from
harried executives to soccer moms-and baby boomers in particular-is
eager to try anything that keeps them looking younger and feeling
better. That makes this the perfect time to take the plunge into
one of the hottest personal-service businesses around: the day
spa.

Day spas offer the same beauty and wellness services as pricier
destination spas and resorts but don't require the same time
commitment. According to the ISPA 2002 Spa Industry Study
from the International SPA Association (ISPA), there were nearly
156 million spa visits in the United States in 2001, 68 percent of
which were made to day spas. Revenues for the U.S. spa industry
were nearly $11 billion in 2001, up from $5 billion two years
earlier. Yet this spending occurred at fewer than 10,000 spa
locations nationwide-75 percent of which are day spas-meaning the
market is open for new spa owners.

Spa Basics

There are two kinds of day spas. Standard day spas offer body
treatments and lifestyle services. Medical spas offer traditional
spa services as well as services that must be provided by a
licensed medical practitioner, such as acupuncture or
microdermabrasion. Although conventional wisdom holds that true day
spas must offer hydrotherapies like Scotch hose treatments or
underwater massage, many day spas do well with "dry"
services alone.

"Not all clients are comfortable with water therapy,"
says Hannelore R. Leavy, founder and executive director of The Day
Spa Association in Union City, New Jersey. "Americans are shy
about taking off their clothes and standing naked in front of a
stranger who will perform unfamiliar therapies on them. It's
better to open your spa without water therapy, especially if your
funds are limited. But you can put it into your business plan so
you're ready to expand when and if your clients are ready for
it."

Dennis Gullo, 47, used an easy formula for determining which
services to offer in his spa. "I started with [commonly known]
services, like massages," he says. "I didn't want to
spend energy trying to sell services no one's heard of."
The formula's worked: The spa portion of Gullo's Moments
Salon & Day Spa in Mount Laurel, New Jersey, generated 44
percent of the business' total sales of $1.8 million in
2003.

Laying the Groundwork

Finding out what your prospective clients are ready for is an
important part of the planning for your new venture. Case in point:
ISPA's 2001 Day Spa Usage Survey indicates that two of
the top five reasons people don't visit a day spa are that they
think spas are too costly, and they feel they're not the
"spa type." So study the demographics of your target
market to see whether, say, the residents of a farming community in
the heart of Nebraska are the type who will be interested in
pedicures. The fact is, you're more likely to attract clientele
if the market area is populated with white-collar professionals
under age 45 who have college degrees, according to the survey.

"You also have to educate people about your services so
they don't think of them as a luxury," Gullo says.
"People feel guilty about pampering themselves, so instead, we
position ourselves as providers of healthy living
services."

Armed with demographic analysis, you can write your business
plan. This plan serves as a road map for charting your course and
as an invaluable tool for showing a banker how savvy you are about
the realities of running a business. Your plan should include a
description of your business and the services you'll offer;
market strategies (developed with the demographic info you've
collected); an analysis of your competition; an operations and
management plan; financial information, including assets and
startup capital needs; an income/expense forecast and repayment
plan; and a personnel management plan.

Services & Equipment

Also early in the planning process, you'll have to decide
exactly which services to offer. Treatments typically offered in
day spas include massages; facials and makeup application;
electrolysis; spa manicures and pedicures; body treatments like
exfoliation, wraps and packs; aromatherapy; and hair services like
cutting, styling and coloring. Hydrotherapies include hydromassage,
mineral and seaweed baths, dry and moist heat, and shower massage.
Many spas also offer healing therapies such as Reiki (a form of
"energy healing") and acupressure, which must be
performed by a licensed practitioner, depending on which state
you're in. Services are usually combined in complementary spa
packages that guests enjoy for four to eight hours, but Ã la
carte services and pricing should also be available, both for
clients who wish to mix and match their treatments, and for clients
who would like to try something new.

The range of services you plan to offer will have a major
bearing on the kind of facility you choose. Because spa equipment
(like massage tables) tends to be large, you'll need enough
room to spread out and create a relaxing atmosphere. Your best
options are a free-standing building, a storefront property or a
strip mall store. Mall locations usually aren't optimal since
people go to malls to shop, not to enjoy a salt glow treatment, and
the rent is often very high.

To attract an upper-end clientele, you'll need a
well-appointed facility in a good neighborhood. It should be
located near other retail businesses for good visibility, and it
must have sufficient parking. Don't underestimate the
importance of parking. Spa services are not necessities, not even
for baby boomers bent on preserving their youth. So if it's
difficult to visit your spa for any reason, they won't come-or
they'll go somewhere else.

Day spas require a lot of equipment to emulate the level of
service found in resort spas. These capital expenditures will drive
your start-up costs up fast, so you're likely to need financial
backing to get the show on the road. If you find that your grand
plans exceed what the bank will offer you and what your personal
savings can float, control costs by buying quality used equipment
or scaling back the number of services you offer.

The equipment typically needed for a day spa includes massage
tables, manicure and pedicure stations, and reclining facial
chairs. Hydrotherapy equipment may include a Scotch hose, a
hydrotherapy tub, a sauna, a Swiss shower, a Vichy shower, a
Jacuzzi/whirlpool tub and a steam cabinet. Be prepared for sticker
shock: High-quality spa equipment can run from $4,000 to $25,000
per item or even higher. So be sure to buy wisely. It's easy to
get caught up in equipping your spa with the best of
everything-then never using it.

"We spent $5,000 on a pedicure bed that we're using to
do $8 eyebrow waxes," says Daryl Jenkins, 38. "Think
about how many services you'll have to do to pay for the [item]
before you buy it." His company, HairXtreme Salon and
Spa in Chester, Virginia, projects 2004 sales of $625,000.

Retail Therapy

In addition to all the typical office equipment, such as a
copier and office supplies, you'll need to buy the
following:

Staffing and Advertising Your Salon

Staff Savvy

Once you have all this cool stuff in place, you'll need
qualified people to use it properly. Cosmetology schools are the
best places to find personnel trained to handle the equipment and
products found in a day spa. Gullo has a foolproof method for
mining the best and brightest: His staff teaches classes at the
local cosmetology school. "That way, up-and-coming students
know who we are and what we offer," he says.

Many states require personal-care workers (including spa owners
themselves) to have at least a cosmetology license; others require
practitioners to have a certain number of hours of specialized
training and additional licensing. Check with your state board of
cosmetology to find out about the requirements.

The staffers you'll need are: aestheticians, who do
massages, facials, waxing and specialty services like
hydro-therapy; massage therapists, whose services provide stress
relief and relaxation; electrologists, who remove excess body hair;
and manicurists, who provide manicure and pedicure services. Other
professionals you may need on your team include a makeup artist, a
hairstylist and a spa manager, as well as staff for the reception
desk. Debbie Elliott, 49, of Debbie Elliott
Salon and Day Spa in Portland, Maine, suggests cross-training
employees to handle more than one job, as well as hiring unlicensed
assistants to handle tasks like escorting guests, changing
treatment wraps and mixing treatments. "That saves the
licensed people for the actual services, which improves our
productivity and helps make the spa profitable," she says. She
expects her spa to bring in sales of $1.3 million in 2004.

When hiring, she recommends looking for friendly and polite
people. Says Elliott, "Personality is more important than
skill, because you can teach people what to do, but you can't
give them a new personality."

Spreading the Word

Advertising is also crucial for a successful start-up. Because
it's likely that some people in your market may never have
considered visiting a spa or are unfamiliar with the services you
offer, it's up to you to tell them about the spa's many
benefits. Besides a Yellow Pages line ad, you may find a
well-placed series of ads in the local newspaper or publication
targeting upscale readers is an effective way to introduce the
public to your services.

Once you hook your customers, make sure you provide the best
level of service possible. Word-of-mouth advertising is crucial in
this business and can mean the difference between many years of
tidy profits or ignominious defeat. Meanwhile, a savvy way to cash
in on good word-of-mouth is by instituting a referral program,
which rewards clients for referring new customers. "Every
start-up should have a referral program," says Gullo.
"It's a soft expense that can lead to a lot of new
business."

Elliott swears by gift certificates as a great source of new
business, which added $180,000 to her bottom line in
2002."More often than not," she says, "clients first
come to us because of a gift certificate."

Learning Curve

As a spa owner, you need to keep up on trends, both in the spa
industry and in business in general. To keep abreast of what's
new, consider joining a professional trade association like
The Day
Spa Association (201-865-2065) or the International SPA
Association (888-651-4772). You'll also find tons of
information online that can help you do business better, faster and
smarter.

Gullo also recommends getting a general business education at a
traditional college. "Industry-specific education is valuable,
but you need to know sound business principles, too," he says.
"You need to have an understanding of what makes business work
to make your business thrive."